Finland attracted a record 133 foreign direct investment (FDI) projects in 2016, outperforming the other Nordic countries as a FDI destination for the fifth consecutive year, according to EY’s Attractiveness Report 2017. The figure, which does not include mergers and acquisitions, was up by 27% from the previous year, placing Finland as the 11th highest recipient of FDI projects across Europe. Sweden was ranked 15th, Denmark 18th and Norway 28th in the report.

Finland captured 41% of all the FDI projects initiated in the Nordics in 2016, which was down 1% from the previous year. The FDI projects created 700 jobs in Finland, which represented a 28% market share of Nordic-wide FDI employment, up from 21% in 2015. The main countries of origin for FDI projects into Finland were Sweden (32 projects), USA (17), Germany (12) and China (9). Chinese companies initiated a total of 17 FDI projects in the Nordics, up by 143%.

Renewable energy attracts interest

In 2016, the majority of foreign investment into Finland was generated by the manufacturing, and finance and business services industries, with both recording peak years in terms of the number of FDI projects launched. These two industries accounted for 77% of all FDI projects and 71% of job creation.

“The majority of the FDI projects were in software and IT services, together with communications and business services. Renewable energy is also among the top five FDI target sectors in Finland, which is quite unique compared to the global FDI trends,” says Laurens van der Schoor, Incentives & Free Zones Advisor at Investment Consulting Associates (ICA).

R&D is a key driver in Finland

In 2016, the key motive for FDI projects in Finland was technology and innovation, whereas on the regional and global level the main drivers were proximity to markets and domestic market growth potential. Finland secured over 50% of all R&D facilities built in the Nordics in 2016.

“This reflects the important role of R&D in Finland’s proposition for attracting FDI. The foreign investments show a strong focus on design, development and testing in industries like software, communications and business services,” says van der Schoor.

According to the report, foreign investors continue to be attracted to Finland’s high quality supply of scientists and engineers, with the country’s skilled and cost competitive workforce remaining a key determining factor affecting investments decisions.

The Greater Helsinki region ranked as the ninth highest metropole region for FDI projects across Europe, after securing 94 projects of the 133 projects initiated in Finland – up by an impressive 45% from the previous year.

According to statistics compiled by Finpro’s Invest in Finland, a total of 270 new foreign companies entered the Finnish market in 2016, which also includes mergers and acquisitions. The number has increased every year since 2012.

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Invest in Finland is part of Business Finland, the Finnish innovation funding, trade, investment, and travel promotion organization, headquartered in Helsinki. Business Finland is fully owned by the Finnish Government. Business Finland employs 600 experts in 40 offices globally and in 20 regional offices around Finland. Business Finland is part of the Team Finland network. www.businessfinland.com